Oreb v Australian Securities and Investments Commission

[2016] FCAFC 192

FEDERAL COURT OF AUSTRALIA

Oreb v Australian Securities and Investments Commission [2016] FCAFC 192

Appeal from:

ASE16 v Australian Securities and Investments Commission [2016] FCA 321

File number:

NSD 574 of 2016

Judges:

RARES, DAVIES AND GLEESON JJ

Date of judgment:

25 November 2016

Catchwords:

PRACTICE AND PROCEDURE — Suppression and non-publication orders — whether grounds for making an order— whether prejudice to the proper administration of justice

Legislation:

Corporations Act 2001 (Cth), s 206F

Federal Court of Australia Act 1976 (Cth), s 37AF

Cases cited:

Attorney-General v Leveller Magazine Ltd [1979] AC 440

Dickason v Dickason (1913) 17 CLR 50

Eastman v Director of Public Prosecutions (No 2) (2014) 9 ACTLR 178

Hogan v Australian Crime Commission (2010) 240 CLR 651

John Fairfax & Sons Ltd v Police Tribunal (NSW) (1986) 5 NSWLR 465

Date of hearing:

25 November 2016

Registry:

New South Wales

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

Corporations and Corporate Insolvency

Category:

Catchwords

Number of paragraphs:

25

Counsel for the Appellants:

Mr R Lancaster SC with Mr H El-Hoge
and Mr T Boyle

Solicitors for the Appellants:

William James Lawyers

Counsel for the Respondent:

Mr S P Donoghue QC with Mr S B
Rosewarne

Solicitors for the Respondent:

Australian Securities and Investments Commission

ORDERS

NSD 574 of 2016

BETWEEN:

PETER CHRISTOPHER OREB

First Appellant

INGRID SUSAN WEBBER

Second Appellant

AND:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Respondent

JUDGES:	RARES, DAVIES AND GLEESON JJ
DATE OF ORDER:	25 NOVEMBER 2016

THE COURT ORDERS THAT:

1.The appellants’ oral application that their identity in this proceeding be suppressed be dismissed.

2.Orders 1, 2 and 3 made by the Court in proceedings NSD 1051 of 2015 on 1 April 2016 (“orders”) and the order for extension of order 3 of the orders made on 28 September 2016 be set aside.

3.On or before 30 November 2016, the appellants file an amended notice of appeal that names them by their actual names and not by pseudonym.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
(REVISED FROM THE TRANSCRIPT)

THE COURT:

INTRODUCTION

1. On 1 April 2016, the primary judge made the following suppression orders:

   1.Information tending to reveal the identity of the applicants including the companies with which they were and are associated not be disclosed by publication or otherwise.

   2.        The affidavits:

   (a)       affirmed by Jonathan Edward O’Loughlin on 2 September 2015;

   (b)       sworn by the second applicant on 23 September 2015; and

   (c)       affirmed by Jennifer Parbery on 23 September 2015;

   not be disclosed or made available for inspection to any person other than the respondent or its legal representatives.

   3.        Orders 1 and 2 shall operate until 30 September 2016.

2. On 28 September 2016, her Honour extended the operation of order 3 until 30 March 2017. 

3. In an email to the parties, on 22 November 2016, the Full Court informed the parties that it wished to hear submissions at the hearing of the appeal today about whether the information falling within the scope of her Honour’s orders should continue to be suppressed, having regard to the principles of open justice discussed in authorities such as John Fairfax & Sons Ltd v Police Tribunal (NSW) (1986) 5 NSWLR 465, Attorney-General v Leveller Magazine Ltd [1979] AC 440 and Eastman v Director of Public Prosecutions (No 2) (2014) 9 ACTLR 178 at 235-236 [186]-[190].

   BACKGROUND

4. On 1 April 2016, when her Honour made final orders, she also made the suppression orders and published her reasons for all of those orders.  The primary judge identified that the appellants’ evidence in support of the suppression orders was given in an affidavit of the second appellant, Ingrid Webber, sworn 23 September 2015, to whom her Honour gave the pseudonym ASF16.  The first appellant, to whom her Honour gave the pseudonym ASE16, was Peter Oreb.  Her Honour explained that Ms Webber and Mr Oreb were associated with a global group of companies  that were in the business of supplying contingent workforce solutions to some of the largest corporations in the world.  The group had operated successfully over 20 years with operations in nearly 70 countries. 

5. Her Honour accurately summarised Ms Webber’s concerns as to confidentiality.  In essence, Ms Webber explained that it was important that the appellants’ names and those of the companies in liquidation with which they were associated be suppressed.  She said that this protection was needed because if those names were disclosed in connection with the proceedings below, the actions of the Australian Securities and Investments Commission (ASIC), in issuing notices requiring the appellants to show cause why they should not be disqualified from managing corporations pursuant to s 206F of the Corporations Act 2001 (Cth) might be publicly revealed. Ms Webber said that any such disclosure could have a crippling effect on the operating businesses with which the appellants were then, and are still, associated. That was because, Ms Webber said, clients of the appellants’ employer group’s businesses would not want to be associated with organisations that raised risks to their supply chain, and that even an allegation, by a regulator such as ASIC, of their non-compliance with statutory obligations could be used by clients as a reason not to renew contracts.

6. Ms Webber said, and her Honour accepted, that the source of the majority of the appellants’ contracts was through a tender process, which included due diligence of the proposed supplier.  She asserted that, in such processes, suppliers would be removed at the due diligence stage without them being given the opportunity to explain any of the findings from the due diligence process.  She said that such a removal could affect her employer group’s new business and the renewal of existing clients.  She also said that competitors used regulatory audits or other statutory activity as a reason that would be put forward to existing clients not to engage or continue to engage companies or persons who were subject to such action.  Ms Webber was concerned that, if the appellants’ names were made public in connection with the proceedings, their competitors would use that fact to persuade clients not to engage them.

   THE PRIMARY JUDGE’S REASONS

7. Her Honour discussed in her reasons some of the principles relating to the making of orders for suppression or non-publication under s 37AF of the Federal Court of Australia Act 1976 (Cth). The primary judge noted that the appellants had submitted at the hearing on 1 December 2015 that if their construction of the provisions of the Corporations Act, the subject of the proceedings before her Honour and on appeal, was correct, then ASIC would have been acting without jurisdiction in issuing the notices, and therefore the proper administration of justice would be prejudiced if a suppression order was not made in the terms sought. 

8. The appellants had argued to her Honour, and repeated to us, that the manifest disadvantage to their businesses and the impact, potentially, on many employees showed that it was necessary in the interests of justice, to suppress their names from publication while they were seeking to challenge the private administrative proceedings held under s 206F of the Act that ASIC had brought against them.

9. Her Honour summarised the submissions of the appellants as follows (at [88]):

   Here, it is not particular information, which is not otherwise accessible to competitors, that the applicants seek to suppress.  Rather, it is the applicants’ names and anything within the judgment which would allow a party reading it to draw a connection to the applicants.  The commercial advantage which competitors would gain if the order were not made is that the mere association with the subject matter of the judgment and inferences that can be drawn from that could be used by those competitors to undermine the applicants in an industry which relies on the integrity and reputation of its suppliers and their compliance with regulation.  (emphasis added)

10. Her Honour also said (at [89]):

    It is relevant to note that this order is sought in circumstances where:

    (1)the proceedings have been in the Court list on at least two occasions, naming the applicants;

    (2)       no order of this nature was sought until the final hearing;

    (3)no confidentiality order was sought upon the reading of the applicants’ evidence;  and

    (4)the applicants seek suppression of the names of companies, now in liquidation, of which they were formerly officers.  Their role as former officers of those companies is available by undertaking a search of the records maintained by ASIC although in doing so the information that the Notices have been served will not be available.  (emphasis added)

11. Her Honour considered that it was necessary to make the suppression orders to prevent prejudice to the administration of justice.  Her Honour reasoned that, although the threshold which justified the making of a suppression order is high, on the evidence before her the appellants feared more than mere embarrassment or inconvenience.  Rather, the primary judge found that the appellants feared that, as a result of their association with the proceedings before her Honour, their and their employer group’s commercial reputations would come under scrutiny, their competitors would gain competitive advantage and the group’s business would be adversely affected. 

12. Her Honour pointed to the private nature of process under s 206F of the Act and to the fact that service of the notices complained of would not be a matter of public record. Her Honour found that it was not in the interests of the administration of justice that trade competitors should get an advantage, or, conversely, that the appellants should be disadvantaged, by the very fact of their having brought proceedings in the Court to challenge the validity of the notices. Her Honour said that the proceedings below would not finally determine the outcome of the process under s 206F of the Act. Her Honour thus made the suppression orders.

    THE APPELLANTS’ SUBMISSIONS

13. The appellants sought that the Full Court make orders in the appeal, in similar terms to the suppression orders based on Ms Webber’s evidence, for the reasons given by her Honour.

14. When members of the Court during the course of argument this morning raised the issue that order 1 of the suppression orders appeared to be a common rule, was too wide in scope as it appeared generally to bind  anyone from disclosing information about the identity of the appellants and companies they were associated with, regardless of their connection to the proceedings below,  senior counsel for the appellants sought an order in the appeal that order 1, as made by her Honour, be limited by a qualification to the effect of adding “of reasons for judgment, material read in evidence or produced by way of submission”. 

15. The Full Court also raised with the appellants’ senior counsel that her Honour’s reasons recorded that prior to the hearing and application for a suppression order, the proceedings had been in the Court list on at least two occasions, naming the appellants, and thus the information that connected the appellants to the proceedings below was already in the public domain when the suppression order was made.  Senior counsel argued that it was possible to make a suppression order after some material had been revealed in open court, referring to what Rares, Wigney JJ and Cowdroy AJ had said in Eastman 9 ACTLR at 236 [188]. He argued that it was important that the appellants be protected from the risk that some connection might be made between them and companies with which they were associated with the reasons given by her Honour. Senior counsel contended that this was necessary to prevent prejudice to the administration of justice. He relied on the primary judge’s reasons for making the suppression orders as being correct.

    CONSIDERATION

16. In our opinion, the suppression orders that her Honour made, with or without the modifications that the appellants seek us to make in this appeal, were beyond the Court’s jurisdiction to make and should be set aside.

17. First, order 1 was cast in terms that are too broad, as the order is not confined to the facts or circumstances of the proceeding below but binds anyone from disclosing the identity of the appellants and companies with which they were associated.  An order that has such an operation is not within the power of the Court to make: see  Police Tribunal 5 NSWLR at 477, A-C where McHugh JA said, Glass JA agreeing:

    … an order of a court prohibiting the publication of evidence is only valid if it is really necessary to secure the proper administration of justice in proceedings before it. Moreover, an order prohibiting publication of evidence must be clear in its terms and do no more than is necessary to achieve the due administration of justice. The making of the order must also be reasonably necessary; and there must be some material before the court upon which it can reasonably reach the conclusion that it is necessary to make an order prohibiting publication. Mere belief that the order is necessary is insufficient … Courts have no general authority … to make orders binding people in their conduct outside the courtroom. Judicial power is concerned with the determination of disputes and the making of orders concerning existing rights, duties and liabilities of persons involved in proceedings before the courts. An order made in court is no doubt binding on the parties, the witnesses and other persons in the courtroom. But an order purporting to operate as a common rule and to bind people generally is an exercise of legislative – not judicial-power.  (emphasis added)

    Thus, the primary judge had no jurisdiction to make order 1 in the form that her Honour did.

18. Secondly, in any event, the orders made by the primary judge went beyond what was necessary to protect any legitimate interests of the appellants in the administration of justice.  By the time of the making of the suppression orders, the appellants’ names and evidence had been publicly disclosed in connection with the proceedings without any prior limitation on their publication.  In those circumstances, the suppression orders could not have been necessary to secure the proper administration of justice.

19. Her Honour’s reasons demonstrated that, at the time she made her suppression orders on 1 April 2016, four months had passed since the hearing, the names of the appellants had been publicly disclosed in Court lists on at least two occasions, and appellants’ evidence had been read in open Court without any confidentiality order.   In those circumstances, there could be no necessity, months later, to make an order suppressing or prohibiting publication of the appellants’ identity or their connection to the proceedings.  That “secret”, if it ever had been a secret, was out and had been out for some time. 

20. In Eastman 9 ACTLR 178, the Full Court discussed the powers of a court to deal with a situation of the kind considered by Gleeson CJ, Clarke and Sheller JJA in R v Smith (1996) 86 A Crim R 308 at 313. In R v Smith, during committal proceedings before a magistrate, the names of two police informers were disclosed in open court, prompting an application for an order that their true identities be concealed.  The magistrate refused the order but on appeal, the Court of Appeal held that as the informers’ true identities were protected by public interest immunity, the suppression order was necessary for the administration of justice.  In Eastman 9 ACTLR at 236 [188], the Full Court said:

    It follows that the Full Court has power to protect from further disclosure information or a document that has been disclosed but that properly attracts public interest, or matter of state, immunity, although whether and to what extent it can or will do so will depend on the extent or degree of the existing disclosure. Different considerations will arise if the information has become a matter of public knowledge the subject of widespread publication: Smith 86 at 313. It must always be necessary to make such an order in the interests of justice to justify the exercise of the power. Ordinarily, once the secret is out to the point that it is beyond the capacity of the Court to control its disclosure, it will be difficult, if not impossible, to satisfy the jurisdictional threshold of necessity in the interests of justice to make a suppression or non-publication order: cf Attorney-General v Leveller Magazine Ltd [1979] AC 440 eg at 468F-G per Lord Russell of Killowen. (emphasis added)

21. The fallacy behind the appellants’ submissions is demonstrated by the decision in Leveller [1979] AC 440, once it is appreciated that their names had been already publicly disclosed in connection with the proceedings well before her Honour made the suppression orders. The file numbers of proceedings, also appear in the Court’s lists so that a subsequent pseudonym applied to a party’s name would not prevent, in the absence of evidence to the contrary, someone searching earlier Court lists to make the connection. Any member of the public, who had seen the Court lists, or who had been present in open Court when the proceedings had been before the primary judge, could have made the connection between the appellants and the proceedings below. Moreover, the appellants’ identities and names are matters of public record in connection with their relationships to the companies in liquidation the subject of the notices.

22. Her Honour’s reasons referred to the information already in the public domain that connected the appellants to the proceedings below.  As a result, in our opinion, in those circumstances the orders that operated to suppress their identity and that of companies with which they were associated as well as the whole of their affidavits in the proceedings that had been read in open Court months before, could not have been necessary to protect the administration of justice.  Here the publication of the appellants’ names in the Court lists and the substance of their evidence had occurred in open Court without a suppression order.  Their names had been used publicly in association with the proceedings in Court and this had been a matter of public record from the inception of the proceedings. 

23. In our opinion, those publications having happened without any steps being taken to suppress the appellants’ names at the inception of the proceedings, meant that it would have been very difficult to argue later for any form of suppression order in accordance with the principles of open justice:  Dickason v Dickason (1913) 17 CLR 50 at 51 per Barton ACJ with whom Isaacs, Gavan Duffy, Powers and Rich JJ agreed; Hogan v Australian Crime Commission (2010) 240 CLR 651 at 664-665 [30]-[34], 667 [42]-[43] per French CJ, Gummow, Hayne, Heydon and Kiefel JJ.

24. In addition, in any event, the appellants’ past commercial activities by which they had been associated with companies that had gone into liquidation were matters of public record, on which any members of the public, including commercial competitors, could comment.  No doubt some deficiencies in the administration of one or more companies in liquidation with which the appellants were associated were publicly known, including through the liquidators’ reports or by reason of non-confidential information that creditors, who were owed money, may have had or made public themselves.  This meant that there was no necessity to make suppression orders of the kind that her Honour made or as the appellants now seek in this appeal.

    CONCLUSION

1. For these reasons, we refuse to make any orders suppressing the identity of the appellants in the appeal.  Their full names should be substituted for the pseudonyms on the record.  Her Honour’s suppression orders must also be set aside. 

I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Rares, Davies and Gleeson.

Associate:

Dated:        23 January 2017